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Osborne spending review will slash 5% from Northern Ireland budget, warns DUP's Foster

By Liam Clarke

Published 26/11/2015

Concerned: Arlene Foster
Concerned: Arlene Foster
Chancellor George Osborne in the Commons yesterday

The Chancellor's autumn Spending Review will reduce Northern Ireland's budget by more than 5% by 2020 in real terms, according to DUP Finance Minister Arlene Foster.

The Executive's block grant will be over £11bn by 2019-20, but the amount of cash that Stormont will have to spend will rise only marginally from £9.7bn next year to £9.9bn in 2019-20 - a drop of 5.3% that Ms Foster said would cause considerable pressures.

"If we want to protect health and education services, the Executive will face hard decisions as that protection will impact on other budgets," she added.

However, in an exclusive article in today's Belfast Telegraph, George Osborne pledged to "go further than ever before to respond to local priorities and so we have backed the Executive with a major package".

Among the Chancellor's announcements were a £3.35-a-week boost to the State pension, taking the basic payment to £119.30. The capital building budget will also rise 12.4% to more than £1.2bn by 2020, providing over £600m in extra funding over the period.

Mr Osborne was forced to scrap tax credit changes yesterday. If they had gone ahead, the Department for Social Development estimates around 121,000 households here would have lost an average of £918 a year.

That also means that a fund of £240m set up to offset tax credit cuts has been freed up.

However, Mr Osborne still intends to cut £12bn from benefits across the UK.

Another boost is that the Chancellor has not increased fuel duty despite low prices. As well as reducing costs, that helps undermine incentives to smuggle or launder fuel.

Mr Osborne is still aiming for a £10.1bn budget surplus by the May 2020 election. Government borrowing is £8bn less than forecast, but the deficit is rising.

State spending as a whole is scheduled to increase by 8.6% before the next election. Essential services like policing, health, education and international aid will be protected in Britain.

There was also a major boost in defence spending. Yesterday, Ben Wallace, the junior Northern Ireland minister, promised East Belfast DUP MP Gavin Robinson a round table meeting would be arranged for Northern Ireland firms wishing to participate in defence contracts.

However, Mr Osborne's proposals received a mixed reception here. Glynn Roberts of the NI Independent Retail Trade Association said local shopkeepers would struggle to pay the increased minimum wage, which is the centrepiece of Mr Osborne's arguments for reducing benefits. "How does the Treasury expect struggling small business owners to afford the National Living Wage by 2020?" Mr Roberts asked.

Most parties welcomed the scrapping of tax credits, a move that will benefit low earners.

"These changes would have seen more than 120,000 families in Northern Ireland unfairly penalised," said Tom Elliott of the UUP.

The shop workers union USDAW also welcomed the change, which they lobbied for.

"DUP MPs and peers were integral to that opposition, and I am delighted the Government has decided now to scrap these proposed cuts," said the DUP's Nigel Dodds. Other confirmed measures included:

The £7m Regional Air Connectivity Fund, which will support new air routes, including from Belfast to Carlisle and from Derry to Dublin

Additional support of £160m for the PSNI to combat the ongoing threat from dissident republican terrorists.

Belfast Telegraph

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